Landlord sought a warrant of eviction and judgment of possession for unpaid rent against tenant. The parties entered into a lease obligating tenant to pay its share of water consumption, among other things, but landlord did not bill for water usage. Non-party Safeguard Properties agreed to buy the premises, and for the first time landlord sent tenant a bill for water charges for the past three and one-half years. The court noted while mere delay alone was no defense to an attempt to recover "stale" rent, laches may be a complete defense in a case of prejudice to the tenant resulting from delay. It stated tenant met the first three elements of a laches defense as landlord delayed in asserting a claim for the water charges of which tenant had no notice, but also ruled the fourth element, prejudice to tenant in asserting a belated claim for the charges, was palpable. The court ruled tenant entered into a subsequent amended lease for obligations specifically provided for therein. Landlord's failure to bill for water charges for over three years prejudiced tenant's negotiation of the lease amendment, and its attempt to recover stale rent for those charges was barred by laches.

Full Case Digest Text

Decision and Order

Findings of Fact

Petitioner Lumi Ram Development Corp. (“Lumi Ram”), a debtor-in-possession and landlord of commercial premises known as and located at 615 Fifth Avenue, Larchmont, New York, in the Town of Mamaroneck (the “Premises”), brings this summary proceeding against its tenant, respondent Empire State Crossfit (“Empire”), seeking a warrant of eviction and a judgment of possession and for unpaid rent. The matter came on for trial before this Court on September 25, 2017, at which time petitioner appeared by counsel Andrew Brodnick, Esq., and respondent appeared pro se. It is undisputed that the parties entered into a lease for the Premises on or about June 7, 2012, providing for monthly rent in an amount not relevant to this proceeding. Rider A to the lease obligates Empire to pay for “it’s [sic] proportionate share of water consumption.”1 In addition, although it is not reflected in the lease, the parties entered into a contemporaneous oral agreement that Empire would pay $400 per month for use of a parking lot across the street from the Premises. From the commencement of the lease until January 1, 2017, Empire paid the $400 parking charge, but LumiRam did not bill Empire for water usage.

In September 2016, the parties entered into a tripartite agreement among themselves and Safeguard Properties II, LLC (“Safeguard”), which had agreed to buy the Premises. Pursuant to the agreement, entitled “First Amendment to Lease,” if Safeguard consummates its purchase of the Premises, then (a) the expiration date of the lease is extended from August 31, 2017, to December 31, 2017; (b) Empire waives its right to renew the lease beyond that date; and (c) in return, Empire’s rent for the period May 1, 2017, through December 31, 2017, is abated so long as Empire is not in default, and Empire is paid $25,000 as further consideration for its waiver of the right to renew. Empire was, nevertheless, obliged to pay its proportional share of electric charges through August 31, 2017. No mention was made of water or parking charges.

In July 2017, ten months after the lease amendment, LumiRam for the first time sent Empire a bill for water charges, totaling $2,252.74 for a period of three and a half years, from December 2013 through May 2017. LumiRam’s officer, Corinne Ram, testified that she had calculated Empire’s proportionate share of the water charges from information supplied by the water company. The amount of the bill is not disputed.

The following month, LumiRam sent Empire a bill for $4200 for parking charges, consisting of $400 per month, the amount Empire had previously paid, for the first three months of 2017, and an increased amount of $600 per month for April through August. Ms. Ram testified that she had informed Empire prior to April 1 that the monthly parking charge would be increased to $600 as of April 1. Empire’s principal, Daniel Stearns, testified that he had rejected the rent increase, and thereafter posted a notice to his patrons not to use the parking lot, but he offered no explanation for failure to pay the parking charges for January through March.It is Empire’s failure to pay the water and parking charges that constitute the bases for its non-payment action.

Conclusions of Law

Legal Standards

“A summary proceeding is a special proceeding governed entirely by statute…and it is well established that there must be strict compliance with the statutory requirements to give the court jurisdiction.” Riverside Syndicate, Inc. v. Saltzman, 49 A.D.3d 402, 403, 852 N.Y.S.2d 840 (1st Dept. 2008). A prevailing landlord may recover possession of real property and a money judgment for unpaid rent without regard to amount. N.Y. Uniform Just. Ct. Act §204. In addition, a prevailing landlord may recover amounts identified in a written lease as “added” or “additional” rent, typically consisting of utility charges, late fees, and attorney’s fees. The rule that an item must be identified in a written lease as “added” or “additional” rent is strictly enforced. E.g., Saunders Street Owners Ltd. v. Broudo, 936 N.Y.S.2d 61 (App. Term 2d Dept. 2011).

Water Charges

LumiRam’s bill for water charges incurred as long as three and a half years earlier came as a surprise to its tenant. While mere delay alone is no defense to an attempt to recover “stale” rent, Dwyer v. Mazzola, 171 A.D.2d 726, 567 N.Y.S.2d 281 (2d Dept. 1991), the general practice in the Second Department is that a possessory judgment may not be obtained for rent arrearages that exceed six months. Levister Redev. Co., LLC v. Montgomery, 12 Misc. 3d 1118A, 824 N.Y.S.2d 763 (Mt. Vernon City Ct. 2006). Moreover, laches may be a complete defense in a case of prejudice to the tenant resulting from the delay.

To establish a defense of laches, the tenant must show (1) conduct on the part of the tenant giving rise to the situation of which landlord’s complaint is made and for which the landlord seeks a remedy; (2) delay in asserting the landlord’s rights, the landlord having had knowledge or notice of the tenant’s conduct and having been afforded an opportunity to institute a suit; (3) lack of knowledge or notice on the part of the tenant that the landlord would assert the right on which he bases suit; and (4) injury or prejudice to the tenant in the event that relief is accorded to the landlord or that the suit is not barred (NY Jur 2d, Limitations and Laches §333 (1989)).

Here, there can be no dispute as to the first three elements of the defense, for the landlord concededly delayed in asserting a claim for the water charges, which the tenant had no notice that the landlord would assert. As to the fourth element, the prejudice to the tenant in asserting a belated claim for water charges is palpable. Empire entered into the 2016 lease amendment that was intended to resolve its future obligations to its landlord. Following negotiation of terms that included a compensatory payment and a rent abatement, it had reason to believe that its only obligation to its landlord was the payment of electric charges from May 1 through August 31, 2017, which are explicitly provided for in the amendment. No mention was made of water charges, which presumably would have been a subject of negotiation and explicit treatment if the landlord had made known any intention to bill for them. LumiRam’s failure to bill for these charges for over three years prejudiced Empire’s negotiation of the lease amendment. Under the circumstances, LumiRam’s attempt to recover stale rent for water charges is barred by laches.

Parking Charges

Charges for April through August. Based on the testimony, there was no agreement between the parties that Empire would pay LumiRam $600 per month for use of the parking lot after April 1. I credit Mr. Stearns’s testimony that he rejected LumiRam’s offer to extend the agreement at an increased rate, and that he took steps to discourage his patrons from parking in the space, including the posting of a notice inside his establishment. It appears, as well, that LumiRam took no steps to prevent use of the parking space by anyone. In the absence of an agreement, LumiRam cannot recover rent or other payment for the period beginning April 1.

Charges for January through March. Unlike the later period, the parties do appear to have agreed to a payment of $400 a month until April 1, an amount that Empire had regularly paid since the lease commenced. LumiRam’s problem here, however, is more fundamental. Because of this Court’s limited jurisdiction in a summary proceeding, it may not recover rent or additional rent for items not specified in a written lease. Empire nevertheless contends that the Court may take cognizance of an oral modification of a contract where the terms are performed by the parties. The authority it cites for this proposition, whatever its significance as a matter of contract law, is not pertinent to the question of this Court’s jurisdiction. This Court is without jurisdiction in a summary proceeding to award damages for failure to pay parking charges not included in the lease.

For the foregoing reasons, the petition is denied in its entirety.

This constitutes the Decision and Order of this Court.

Dated: October 24, 2017Mamaroneck, New York

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